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Posts with tag economics

Gold Capped: The effect of mega-blogs on your business

Every week, WoW Insider brings you Gold Capped, in which Basil "Euripides" Berntsen aims to show you how to make money on the auction house, and Insider Trader, which is all about professions. For Gold Capped's inside line on making money in game, check in here every Thursday, and email Basil (new address is basil@wowinsider.com; old one no longer works) with your comments, questions or hate mail!

I've been called a lot of things by a lot of people. The reality is that every time I write about a specific business or tip for making gold, hundreds of people will end up trying it out, and if I write something about one of your favorite (or most profitable) businesses, you may find some of these people competing with you.

The number of people participating in any specific market is going to fluctuate over time naturally, but as I've said before, the people who have the most success are the ones who hang in for the long run. That said, these people tend to have a strange relationship with each other. They're competitors and will undercut vigorously, but they tend to spend less effort on their tenacious competition than one would expect.

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Filed under: Economy, Gold Capped

Gold Capped: Auctionator addon helps you buy, sell and profit


Every week, WoW Insider brings you Gold Capped, in which Basil "Euripides" Berntsen aims to show you how to make money on the auction house, and Insider Trader, which is all about professions. For Gold Capped's inside line on crafting for disenchanting, transmutation, cross-faction arbitrage and more, check in here every Thursday, and email Basil with your comments, questions or hate mail! This week's gold blogosphere post is Kaliope's Cataclysm jewelcrafting coverage.

Auctionator is a simple, lightweight addon that allows you to do some pretty basic stuff very efficiently. I've said before that there are some serious problems with the auction house interface, and even though the last design pass left it in a better situation than it was before, it's still pretty bad for a few reasons:
  • You can't see the price of your competition when you are listing your auctions.
  • The default suggested price is absolute nonsense and doesn't contain a buyout.
  • You can't see the unit price for auctions when you buy.
  • You can't sort by anything useful when you buy.
  • You can't save searches to avoid retyping each time.
None of these are game-breaking, but they're the reason every single person with over 100,000g uses addons. I am still an Auctioneer user, but while its dev team was sitting on a nonfunctional development build when patch 4.0.1 broke the addon, I had to go elsewhere to avoid being tormented by the almost functional default interface. I discovered that of all the addons I played with, Auctionator is the one that will remain part of my toolbox going forward, simply because it has a few killer features that I find easier to use for some tasks.

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Filed under: Economy, Add-Ons, Gold Capped

Gold Capped: Market timing


Want to get Gold Capped? Watch this space every week as Basil (also of the Call to Auction podcast, the Hunting Party podcast and outdps.com writes about making gold in the World of Warcraft. Have questions, comments, or threats for him to get off your damned server? Email Basil!

The prices for all kinds of things fluctuate. I talked a little about this in my post for casual auctioneers, but there is serious money to be made with market timing for very little investment. Basically, the goal is to watch prices for a few weeks, try to predict their next swing, and take advantage by buying low and selling high.

Watching prices

Easier said than done, like most things worth doing. You might get hundreds of items you'd like to watch, and short of a photographic memory or a manual spreadsheet, you're going to need some help keeping track of it all. Enter Market Watcher. This is a nifty addon that, once configured, allows you to scan the auction house for just the things you're interested in, and will show you a graph of their prices over time once you get a couple scans done.

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Filed under: Economy, Add-Ons, Gold Capped

Gold Capped: Buying with Auctioneer's snatch list


Want to get Gold Capped? This column will show you how, and is written by Basil "Euripides" Berntsen, also of outdps.com, the Hunting Party podcast, and the Call to Auction podcast.


Auctioneer has a myriad of uses. I've covered selling, and this week, I'll be covering buying. This addon has way more functionality than most people use, but because of the incredible quantity of complex options, many people never do any of the really cool things with it.

The best way to buy lots of types of items with Auctioneer is with their "snatch" search. The way it works is it goes through your most recent snapshot of the auction house, and presents you with a box that allows you to buy or bid on items you've defined as a "good deal."

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Filed under: Gold Capped

Study: MMOs bringing in $1.4 billion a year

If America's bankers want to get back into Moneytown, apparently they could do a lot worse than designing a hit MMO -- a study by a group named Screen Digest says that the MMO market is hotter than ever. After dropping down to a total of $701 million in 2008, games like World of Warcraft are seeing their revenues rise again, up to a total of $1.4 billion. And not surprisingly, WoW is still leading the charge -- while their overall market share is dropping very slightly, from 60% of the market down to around 58%, they're still making more money than ever. And while other games are picking up some numbers, according to Screen Digest, they're not really stealing players from Azeroth -- they're actually pulling new MMO players in.

Which is understandable -- during times of economic downturn, online games like MMOs are actually positioned to do very well. Why spend $15 on one night at the movies when you can spend it on a whole month of entertainment? World of Warcraft may have brought the MMO monster to the surface, but according to numbers like these, this is a game genre that's going to be extremely popular (and profitable) for a long time to come.

Filed under: Analysis / Opinion, Virtual selves, Odds and ends, Blizzard, Economy, Making money

Will the economic downturn hurt WoW?

GamePolitcs had an interesting news brief about Michael Pachter, a financial analyst with Wedbush-Morgan, who contends that MMOs will not be impacted in the current economic downturn because the majority of people who play them are "addicts."

The full interview with Pachter is available from Reuters.

Besides the negative stereotypes and sweeping generalizations that come with statements like "people who play [MMOs] are addicts," Pachter does make a good point. He notes that "Losing their jobs makes them more likely to play because they have more time to play."

I thought about this for a minute. If I were to lose my job here at WoW Insider, I would no doubt start looking for new employment almost immediately. I would scale back my expenses – probably get rid of cable TV (Hulu is my TV now anyways), I'd eat out less, I'd use the library more and Barnes & Noble less, and I would generally be more frugal with my spending.

But I don't think I would cancel my WoW subscription.

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Filed under: Analysis / Opinion, Economy

The gold standard: A WoW economics course proposal

If you're like me, you're ... well, you're probably incredibly handsome and charming. But you're also probably interested in WoW's economy, given that it's the biggest and most involved metagame in WoW and a fascinating microcosm of a free-market economy.

I personally think that the how and why of WoW's economy is worth a deep look, and it appears there are a lot of people who agree with me--even some academics. It might even be worth just as much as any other book-learnin'.

At least, that's the basis of David Friedman's World of Warcraft economics course proposal. Friedman is an academic economist from San Jose, CA who's assembled this article as a think-tank for what a WoW economics course would entail if you had to fill it with a semester's worth of content. There's a lot of neat stuff in here, talking about relative prices of ore based on character level and rarity of ore and supply/demand, but he also asks for your input as to possible course material, which I'm sure you could gladly provide in the comments section of his page.

Good idea with sound academic basis, or another in the long list of high falootin' academia's attempts to justify playing WoW on the government's dime? WE REPORT. YOU DECIDE.

Filed under: Analysis / Opinion, Fan stuff, Economy, Making money

Forum Post of the Day: To each according to his need

It seems the vast majority of drama we've heard regarding guild banks comes from ninja schemes and disgruntled members. Vaela of Hyjal expressed her exasperation with guild banks in the Guild Relations forum. She feels that there is an imbalance between players who donate resources to the guild bank and those who make the most withdrawals. The original poster asked for suggestions on systems to fairly distribute guild bank resources.

The responses focused on cooperation and reciprocity with the guild bank. The purpose of the guild bank is to fun the guild's activities and exchange objects of value. In the end, the system comes off as a communist type of public ownership arrangement, as opposed to the free trade system that rules the auction house. To quote Karl Marx, "from each according to his ability, to each according to his need." Communism as we've known it has largely failed, most likely because people don't fully buy into the system.

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Filed under: Analysis / Opinion, Guilds, Economy, Forums, Forum Post of the Day

Breakfast Topic: WoW's influence

People are always talking about WoW as the 800-pound gorilla of the current gaming world (or at least the MMO sub-world). I don't have much non-WoW MMO experience, so I don't know where WoW innovated or where it just took/refined standard genre tropes. I do know that WoW must be making a big splash in the economic side of the gaming industry, with its massive legions of subscribers. I remember reading a while back about some game developers saying WoW was bad for the business because a lot of people were just playing WoW and not buying other games, and there may be something to that; I, for one, would almost certainly have bought a Wii by now if it wasn't for WoW.

What have you observed WoW's influence to be, good or bad, artistic or economic, in the gaming industry? What further influences do you predict it will have?

Filed under: Breakfast Topics, Features

The Economics of Warcraft

This interesting article attempts to explain the economics of Azeroth in terms of real life economic theory. As players, I'm sure we can all poke holes in this theoretical view of our favorite game, or perhaps find the lack of game knowledge frustrating. For example... Goods rarely cost less in the neutral auction house (though sometimes lower prices will reflect lower prices on the Alliance or Horde side - but usually neutral prices are jacked up to the highest possible profit rate), due to the higher cut the Goblins take out of the transaction. Trade-skill items are of less economic importance than seems to be placed on them - very few craftable items being desirable, long-term, over bind on pickup drops found in dungeons. And it does not consider Blizzard's continued efforts to rid the game of gold farmers, which has an ongoing (though variable) impact on the available supply of gold in the economy. However, it is always interesting to see how real economic theory can apply to a virtual game world, and I would say the article is worth a read.

Update: The comments below may well shed more light on the subject than the initial article - so read on!

Filed under: Economy

Vivendi Games earnings see 109% increase

According to Next Generation, World of Warcraft is a nice little cash cow for publisher Vivendi. With first-quarter earnings of $30m this year, an increase of 109% from the same period last year, Vivendi's financials have beaten analyst expectations.

A report from Vivendi says that "this dramatic improvement was driven by a growth in revenues, with an increased proportion relating to the higher margin of World of Warcraft business". While increased development costs are also cited, it seems clear that a fair amount of the money pouring into Vivendi's pockets is staying there.

While players suffer from server and infrastructure problems, is this entirely fair? Well, publishers don't get into the MMO business to make losses. Without seeing a complete breakdown of where our subscription money is going, we're not placed to judge.

Filed under: Analysis / Opinion, Blizzard

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